President Donald Trump has single-handedly reversed more than three decades of mistaken American assumptions about China: namely, that by opening U.S. markets to China, encouraging American business to invest in China, and outsourcing American manufacturing to China, the U.S. would facilitate China’s entry into the so-called “rules based international order.”
This did not happen. China got rich and powerful, and used its wealth and power to its considerable advantage. That’s why President Trump has laid out a new course of action regarding China and the Indo-Pacific in his newly released National Security Strategy.
The Indo-Pacific is already the source of almost half the world’s GDP. That share is certain to grow over the 21st century. Which means that the Indo-Pacific is already and will continue to be among the next century’s key economic and geopolitical battlegrounds. “To thrive at home, we must successfully compete there - and we are,” noted the National Security Strategy.
President Trump signed major agreements during his October 2025 travels that further deepen America’s powerful ties of commerce, culture, technology, and defense, and reaffirm its commitment to a free and open Indo-Pacific.
America retains tremendous assets - the world’s strongest economy and military, world-beating innovation, unrivaled “soft power,” and a historic record of benefiting our allies and partners - that enable it to compete successfully.
Since the Chinese economy reopened to the world in 1979, commercial relations between the U.S. and China have been and remain fundamentally unbalanced. What began as a relationship between a mature, wealthy economy and one of the world’s poorest countries has transformed into one between near peers.
China adapted to the shift in U.S. tariff policy that began in 2017 in part by strengthening its hold on supply chains, especially in the world’s low- and middle-income countries - among the greatest economic battlegrounds of the coming decades. China’s exports to low-income countries doubled between 2020 and 2024. The United States imports Chinese goods indirectly from middlemen and Chinese-built factories in a dozen countries, including Mexico. China’s exports to low-income countries are today nearly four times its exports to the United States.
When President Trump first took office in 2017, China’s exports to the United States stood at 4 percent of its GDP but have since fallen to slightly over 2 percent of its GDP. China continues, however, to export to the United States through other proxy countries.
“Going forward, [the United States] will rebalance [its] economic relationship with China, prioritizing reciprocity and fairness to restore American economic independence,” according to the National Security Strategy.
Trade with China should be balanced and focused on non-sensitive factors. If America remains on a growth path, it should be headed from its present $30 trillion economy in 2025 to $40 trillion in the 2030s, putting the United States in an enviable position to maintain its status as the world’s leading economy.
The ultimate goal of the United States’ strategy towards China and the broader Indo-Pacific is to lay the foundation for long-term economic vitality.
President Donald Trump has reversed more than three decades of mistaken American assumptions about China: namely, that by opening U.S. markets to China, encouraging American business to invest in China, the U.S. would facilitate China’s entry into the so-called “rules based international order.”